Hydroxyurea (HU), a drug effective in the treatment of sickle cell disease, is thought to indirectly promote fetal hemoglobin (Hb F) production by perturbing the maturation of erythroid precursors. The molecular mechanisms involved in HU-mediated regulation of gamma-globin expression currently remain unclear. We identified a HU induced small GTP-binding protein, secretion-associated and ras-related (SAR) in adult erythroid cells by differential display. Stable SAR expression in K562 cells resulted in macrocytosis and immature cells appearance associated with increased gamma-globin mRNA. SAR-mediated induction of the gamma-globin gene also inhibited K562 cell growth including arrest in G1/S phase, apoptosis and delay of maturation, cellular changes consistent with the previously known effects of HU on erythroid cells. Similarly, SAR also enhanced both gamma-and beta-globin transcription in bone marrow primary CD34+ cells, but its effects on gamma-globin induction is more profound than that on beta-globin. Though upregulation of GATA-2 and p21 were observed both in SAR-expressing cells and HU-treated K562 cells, the PI3 kinase and phosphorylated ERK were inhibited specifically in SAR-expressing cells. We also investigated the effects of SAR in primary bone marrow stem cells. A SAR-GFP fusion construct was produced using the pMSCV retroviral expression system. A pure population of SAR-infected CD34+ stem cells was obtained after cell sorting. Both ?- and ?-globin mRNA transcripts were measured dynamically using real-time PCR. SAR enhanced both ?-globin and ?-globin mRNA expression in the CD34+ stem cells, but the effects on ? -globin were larger and more sustained than the effects on ?-globin. While these findings strongly indicate a tight correlation between SAR and ?-globin gene expression, and that SAR (over)expression is sufficient to replicate the HU effects on primary cells and cell lines, they do not answer whether SAR is a necessary component to the pathway. To understand whether SAR is needed for HU mediated ?-globin induction, we knocked- down SAR expression in K562 and Hek293 cells with sRNAi techniques. SAR sRNAi was able to inhibit SAR expression by 40% with a corresponding down regulation ?-globin 60% in K562 cells. In Hek293 cells, SAR RNAi partly block HU mediated S-phase cells arrest. These data reveal a novel role of SAR distinct from its previously known protein trafficking function. We suggest that SAR may participate in both erythroid cell growth and gamma-globin production by regulating PI3-kinase/ERK and GATA-2/p21 dependent signal transduction pathways.